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Good news for motor vehicle financiers in Saskatchewan

Saskatchewan is in the process of updating its consumer protection legislation with respect to the sale and leasing of motor vehicles. On August 20, 2015, the Consumer Protection and Business Practices Amendment Regulations (RRS c.C-30 Reg 1) (the “Regulations”) were filed with the Register of Regulations in Saskatchewan; however, the Regulations are not yet in force. The Regulations appear to address the concerns that motor vehicle financiers raised with the proposed Regulation Amendments (as discussed below) and as a result of the changes reflected in the Regulations motor vehicle financiers will likely not require to be licensed in Saskatchewan as it was previously contemplated.

By way of background, in August 2014 amendments were proposed to the regulations (the “Proposed Regulation Amendments”) under the Saskatchewan Consumer Protection and Business Practices Act. The Proposed Regulation Amendments were of concern to motor vehicle financiers as they necessitated a dealer license for any person carrying on the business of a “dealership”, which was broadly defined to include a business that: (i) sells or leases vehicles or offers vehicles for sale or lease; (ii) solicits orders for the future delivery of vehicles; and (iii) takes vehicles on consignment. The definition even included a business that merely advertises the selling, leasing or consignment of an interest in a vehicle. Neither the proposed definition of “dealer” nor “dealership” limited the interactions captured in such dealings with a consumer. Furthermore, it was unclear under the Proposed Regulation Amendments if the licensing regime applied on sales to “dealers” themselves.

Another area of concern regarding the Proposed Regulation Amendments was the definition of “vehicle” as it went beyond the scope of a vehicle used for personal, family or household purposes. Vehicle was defined to include any device in which a person or thing may be transported on a highway.

The Regulations offer a number of exemptions from the application of the licensing regime set out under the Regulations, including exemptions for: (i) a person who trades in vehicles solely for the purpose of providing or facilitating financing for the purchase or lease of a vehicle; (ii) a person whose dealings with vehicles are incidental to the person’s ordinary business of lending money or dealing with financial contracts or instructions; (iii) a secured creditor enforcing a security interest; and (iv) a lease of a vehicle for a term of less than 120 days. In this respect, it appears that most motor vehicle financiers can find relief from the licensing requirements of the Regulations and will not need to be licensed in Saskatchewan, provided that they are not otherwise a “dealer” of motor vehicles. In addition, the Regulations specifically exempt from the licensing requirements sales to a person – other than a broker – who only sells vehicles to dealers, which addresses the uncertainty that was raised previously by the Proposed Regulation Amendments.

While the exemptions in the Regulations are robust and carve out a number of commercial exceptions, including the foregoing, the definition of “vehicle” remains unchanged and thus it is still possible that a commercial activity without an enumerated exception may require licensing in accordance with the Regulations.

Motor vehicle financiers will welcome the Regulations, as the proposed amendments will provide more certainty when dealing with motor vehicles in Saskatchewan.

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